Author Topic: 36 financial horror stories  (Read 8299 times)

guccigrace

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36 financial horror stories
« on: February 01, 2018, 05:30:07 AM »
Saw this on my buzzfeed today. Glad everyone here seems to realize the error of their ways! Read and learn people.

https://www.buzzfeed.com/venessawong/36-terrifying-financial-horror-stories?utm_term=.jgqPVgME0J#.kqQ1KzDVYx

Xx

carolinap

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Re: 36 financial horror stories
« Reply #1 on: February 01, 2018, 07:34:54 AM »
A lot of good examples, of people learning from their mistakes but... number 25...

"Opening up two credit cards as soon as I turned 18. I didn't know anything about credit cards. I didn't know you had to pay them back right away. I was a college freshman. They didn't teach me all of that in high school. I maxed them both out in the span of six months and didn't make payments for like three years because I didn't know I had to."

HOOOWWWW SOMEONE CAN ASSUME BANKS GIVE FREE MONEYYYYYY

carolinap

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Re: 36 financial horror stories
« Reply #2 on: February 01, 2018, 09:16:51 AM »
HOOOWWWW SOMEONE CAN ASSUME BANKS GIVE FREE MONEYYYYYY
For that matter; how can the banks like the account get to that point?

I just assumed when the author said "didn't make payments for like three years because I didn't know I had to" he meant "I didn't open mail from the bank or took seriously their contacts to tell me to pay it"

kina

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Re: 36 financial horror stories
« Reply #3 on: February 01, 2018, 12:06:14 PM »
A lot of good examples, of people learning from their mistakes but... number 25...

"Opening up two credit cards as soon as I turned 18. I didn't know anything about credit cards. I didn't know you had to pay them back right away. I was a college freshman. They didn't teach me all of that in high school. I maxed them both out in the span of six months and didn't make payments for like three years because I didn't know I had to."

HOOOWWWW SOMEONE CAN ASSUME BANKS GIVE FREE MONEYYYYYY

How does someone that stupid get admitted to college?

Travis

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Re: 36 financial horror stories
« Reply #4 on: February 01, 2018, 12:16:08 PM »
5. That's just a bad bit of survivorship bias.  If only he'd held on to that one stock that ended up being worth a fortune.  If instead his company was one of the ones that went bust, he'd see his move at diversification as brilliant.

The rest of these are good advice except for #36. That's the note you want to end a good article on?

omachi

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Re: 36 financial horror stories
« Reply #5 on: February 01, 2018, 12:17:07 PM »
A lot of good examples, of people learning from their mistakes but... number 25...

"Opening up two credit cards as soon as I turned 18. I didn't know anything about credit cards. I didn't know you had to pay them back right away. I was a college freshman. They didn't teach me all of that in high school. I maxed them both out in the span of six months and didn't make payments for like three years because I didn't know I had to."

HOOOWWWW SOMEONE CAN ASSUME BANKS GIVE FREE MONEYYYYYY

How does someone that stupid get admitted to college?

I'm sure if you can get the money you'll find some college somewhere willing to take your tuition. So probably by using college loans. Wonder if they know they'll have to pay those back, too.

guccigrace

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Re: 36 financial horror stories
« Reply #6 on: February 01, 2018, 11:52:24 PM »
A lot of good examples, of people learning from their mistakes but... number 25...

HOOOWWWW SOMEONE CAN ASSUME BANKS GIVE FREE MONEYYYYYY

They didn't know repayments start right away. Neither did I actually. In Kenya you start repayments a year after graduation so it gives you some time before you have to make payments. Probably a case of someone taking a loan without asking all the right questions. Poor sod must've paid a ton of interest for those 3 years they didn't pay.

guccigrace

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Re: 36 financial horror stories
« Reply #7 on: February 01, 2018, 11:55:07 PM »

The rest of these are good advice except for #36. That's the note you want to end a good article on?

Methinks the author was tryna end on a light note. But yeah it needs context. Like #28 who admits she didn't know the financial impact of having a child. Good article though.

Mac_MacGyver

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Re: 36 financial horror stories
« Reply #8 on: February 02, 2018, 07:34:14 PM »
Oh no!! So much horror!

Travis

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Re: 36 financial horror stories
« Reply #9 on: February 02, 2018, 07:57:14 PM »

The rest of these are good advice except for #36. That's the note you want to end a good article on?

Methinks the author was tryna end on a light note. But yeah it needs context. Like #28 who admits she didn't know the financial impact of having a child. Good article though.

At least #28 doesn't sound like she hates her kid.

AnnaGrowsAMustache

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Re: 36 financial horror stories
« Reply #10 on: February 02, 2018, 08:23:02 PM »

The rest of these are good advice except for #36. That's the note you want to end a good article on?

Methinks the author was tryna end on a light note. But yeah it needs context. Like #28 who admits she didn't know the financial impact of having a child. Good article though.

To be fair, I think a lot of people don't understand the financial impact of having a child. You can add up the cost of formula and nappies and whatever else you deem essential but it's just not possible to predict how you'll actually feel, and how much or little you'll be able to work. For example, you could have severe morning sickness and need to leave work, you could have a child with health issues and need to leave work, you could be utterly exhausted and need more time off work, your relationship could break down and plans made during pregnancy change drastically etc etc. Every pregnancy is different, even for experienced mothers. You simply don't know.

TheGrimSqueaker

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Re: 36 financial horror stories
« Reply #11 on: February 03, 2018, 09:31:43 AM »

The rest of these are good advice except for #36. That's the note you want to end a good article on?

Methinks the author was tryna end on a light note. But yeah it needs context. Like #28 who admits she didn't know the financial impact of having a child. Good article though.

To be fair, I think a lot of people don't understand the financial impact of having a child. You can add up the cost of formula and nappies and whatever else you deem essential but it's just not possible to predict how you'll actually feel, and how much or little you'll be able to work. For example, you could have severe morning sickness and need to leave work, you could have a child with health issues and need to leave work, you could be utterly exhausted and need more time off work, your relationship could break down and plans made during pregnancy change drastically etc etc. Every pregnancy is different, even for experienced mothers. You simply don't know.

The other one people never seem to think about is that their kid may have health or developmental problems and need 24x7 supervision. Unless the parents are affluent to pay for in-home support (in which case they mostly don't qualify for subsidies from the government), having a kid who needs that kind of support and supervision basically ends at least one parent's career as they become a stay-at-home parent. Their lives start to revolve around caring for that one kid, and other kids in the family often get shortchanged. The marriage often doesn't last, because the breadwinning spouse no longer finds much in the way of comfort and support at home and is frequently criticized for "not being there" or "not doing" enough. Then when the breadwinner leaves the person in charge of caring for the child is even more isolated.

AnnaGrowsAMustache

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Re: 36 financial horror stories
« Reply #12 on: February 03, 2018, 04:32:00 PM »

The rest of these are good advice except for #36. That's the note you want to end a good article on?

Methinks the author was tryna end on a light note. But yeah it needs context. Like #28 who admits she didn't know the financial impact of having a child. Good article though.

To be fair, I think a lot of people don't understand the financial impact of having a child. You can add up the cost of formula and nappies and whatever else you deem essential but it's just not possible to predict how you'll actually feel, and how much or little you'll be able to work. For example, you could have severe morning sickness and need to leave work, you could have a child with health issues and need to leave work, you could be utterly exhausted and need more time off work, your relationship could break down and plans made during pregnancy change drastically etc etc. Every pregnancy is different, even for experienced mothers. You simply don't know.

The other one people never seem to think about is that their kid may have health or developmental problems and need 24x7 supervision. Unless the parents are affluent to pay for in-home support (in which case they mostly don't qualify for subsidies from the government), having a kid who needs that kind of support and supervision basically ends at least one parent's career as they become a stay-at-home parent. Their lives start to revolve around caring for that one kid, and other kids in the family often get shortchanged. The marriage often doesn't last, because the breadwinning spouse no longer finds much in the way of comfort and support at home and is frequently criticized for "not being there" or "not doing" enough. Then when the breadwinner leaves the person in charge of caring for the child is even more isolated.

There are also issues that are quite significant when the child is small, but that they grow out of - like reflux, or food intolerances. Those things can take a lot of time and effort to get diagnosed and dealt with, at least in the first year or 18 months. And all of these things are very common. Even a baby a few weeks premature is more to look after than a lot of people have allowed for.

In NZ we have a pregnant Prime Minister at the moment. I sincerely hope everything goes smoothly for her, but it's her first child and I do wonder if she knows what she's getting herself into. Stay at home Dad and all!

fredbear

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Re: 36 financial horror stories
« Reply #13 on: February 03, 2018, 09:28:19 PM »

They didn't know repayments start right away. Neither did I actually. ...

In the US here: I was delighted when I filled out all the forms and was notified that my oldest son qualified for a grant for college.  I thought "grant" meant something like "scholarship" means.  Like, he was given money.  Not so.  It meant "loan," like, I was indebted for money they gave him.  But they didn't make that clear for some months. This was at the end of spring,.  I got notice that I needed to pay starting in the fall.  That was when the "grant"/"loan" matter clarified.  The payment seemed high, so I ran the number and it was.  I called.  They said, "Well, we roll the interest into principal from May to September, and then start the payment based on the new principal."  I was pissed.  So I paid it off.

The next year he got another "grant."  I was notified in May and sent a check in May.  They called: "What's this check?" I told them I was starting payment.

"Oh, you don't have to do that.  Your first payment is in September."

"I'm doing it now."

"Well, we really aren't set up to receive it now."

"You have to accept it, so you better get set up now."

"But.  But why would you want to start paying now, when you can wait?"

"Credit the account.  You will get the next check in June."

So one of those situations where some entity has set up a system to cheat you, with the best motives in the world, and their employees seem genuinely convinced they are only doing it in your best interests.  To help you.  In later decades I would see the same thing redoubled in spades in the health care system.  I would see it in mortgages where you could pay P+I each month, like normal; or interest only each month, or a special minimum payment that very few qualified for, which was less than interest, and meant your loan would last as long as Ozymandias' disjecta membra.  I note it is trying to play out now in politics. 

obstinate

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Re: 36 financial horror stories
« Reply #14 on: February 04, 2018, 09:19:33 PM »
Amazing how many of these people are learning the wrong lesson from their mistakes.

Dicey

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Re: 36 financial horror stories
« Reply #15 on: February 04, 2018, 10:02:51 PM »
I call BS on number 13! Their parents owned the house, but the partner got the loan on it and the title was in the partner's name only? They could have bought the house as tenants in common or joint tenants. Their private life was none of the bank's business. For that matter, the parents could have carried the paper on the loan to protect their offspring.  It's stupid all right, but for all the wrong reasons. There were ways to structure the deal to protect all parties. Sad that nobody did their homework to protect their interests.

talltexan

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Re: 36 financial horror stories
« Reply #16 on: February 21, 2018, 01:21:41 PM »
Children are expensive, AND they reduce your income because of how much time they demand. It's a double-whammy!

NoraLenderbee

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Re: 36 financial horror stories
« Reply #17 on: February 22, 2018, 03:22:30 PM »
SOme of these fall into the "I'm too stupid to breathe" category.

#9--"My only requirement for a house was that it have a garage. So I bought a house without a garage." I don't even know what to think.

Rubic

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Re: 36 financial horror stories
« Reply #18 on: February 22, 2018, 04:42:52 PM »
5. That's just a bad bit of survivorship bias.  If only he'd held on to that one stock that ended up being worth a fortune.  If instead his company was one of the ones that went bust, he'd see his move at diversification as brilliant.

Agreed.

I'm surprised the article included his story as an example.


ePalmtrees

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Re: 36 financial horror stories
« Reply #19 on: February 22, 2018, 05:09:59 PM »

They didn't know repayments start right away. Neither did I actually. ...

In the US here: I was delighted when I filled out all the forms and was notified that my oldest son qualified for a grant for college.  I thought "grant" meant something like "scholarship" means.  Like, he was given money.  Not so.  It meant "loan," like, I was indebted for money they gave him.  But they didn't make that clear for some months. This was at the end of spring,.  I got notice that I needed to pay starting in the fall.  That was when the "grant"/"loan" matter clarified.  The payment seemed high, so I ran the number and it was.  I called.  They said, "Well, we roll the interest into principal from May to September, and then start the payment based on the new principal."  I was pissed.  So I paid it off.

The next year he got another "grant."  I was notified in May and sent a check in May.  They called: "What's this check?" I told them I was starting payment.

"Oh, you don't have to do that.  Your first payment is in September."

"I'm doing it now."

"Well, we really aren't set up to receive it now."

"You have to accept it, so you better get set up now."

"But.  But why would you want to start paying now, when you can wait?"

"Credit the account.  You will get the next check in June."

So one of those situations where some entity has set up a system to cheat you, with the best motives in the world, and their employees seem genuinely convinced they are only doing it in your best interests.  To help you.  In later decades I would see the same thing redoubled in spades in the health care system.  I would see it in mortgages where you could pay P+I each month, like normal; or interest only each month, or a special minimum payment that very few qualified for, which was less than interest, and meant your loan would last as long as Ozymandias' disjecta membra.  I note it is trying to play out now in politics.

I'm sorry, I find it hard to believe that you didn't know it was a loan. You would have had to sign paperwork agreeing to the terms or else they would have had no legal right to collect the money with interest.

SwordGuy

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Re: 36 financial horror stories
« Reply #20 on: February 22, 2018, 06:18:37 PM »
I'm sorry, I find it hard to believe that you didn't know it was a loan. You would have had to sign paperwork agreeing to the terms or else they would have had no legal right to collect the money with interest.

That would imply that they actually READ the paperwork that they signed.

I can assure you that gobs of people buy houses and never, ever, read the documents they are signing.  Why should student loans be any different?

Rockne

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Re: 36 financial horror stories
« Reply #21 on: February 23, 2018, 09:10:40 AM »
Real financial horror story.

In undergrad, I had an accident that uncovered a previously unknown medical condition (as well as created a new one). This discovery led to surgery that resulted in $50k in medical bills.

At the time of the accident (October in that year), I was 21. Soon thereafter, I turned 22 (November). My surgery happened on January 2. While I was covered for the hospitalization that happened that October, the surgery and hospital stay in January was not, as I was no longer covered on my parent's insurance after the 1st of the year (an important fact the insurance company neglected to advise about). As you could imagine, $50k in medical bills to a college student in the mid 90's was quite an insurmountable financial hill to climb, so a bankruptcy was quick to follow. Ruined the next 10 years of my (financial) life. Taught me a great lesson about taking advantage of all medical insurance options available! (I had not known about medical coverage available to undergrads from the financial aid office, or didn't pay attention...)

AnnaGrowsAMustache

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Re: 36 financial horror stories
« Reply #22 on: February 23, 2018, 07:50:24 PM »
Real financial horror story.

In undergrad, I had an accident that uncovered a previously unknown medical condition (as well as created a new one). This discovery led to surgery that resulted in $50k in medical bills.

At the time of the accident (October in that year), I was 21. Soon thereafter, I turned 22 (November). My surgery happened on January 2. While I was covered for the hospitalization that happened that October, the surgery and hospital stay in January was not, as I was no longer covered on my parent's insurance after the 1st of the year (an important fact the insurance company neglected to advise about). As you could imagine, $50k in medical bills to a college student in the mid 90's was quite an insurmountable financial hill to climb, so a bankruptcy was quick to follow. Ruined the next 10 years of my (financial) life. Taught me a great lesson about taking advantage of all medical insurance options available! (I had not known about medical coverage available to undergrads from the financial aid office, or didn't pay attention...)

In NZ everyone is automatically covered by the government Accident Compensation scheme. It's funded by levies from wages based on how risky your industry is, levies on petrol etc etc. It's a no fault scheme that covers anyone who has an accident in NZ, incl tourists, and NZ residents for injuries they sustain overseas (funds treatment in NZ). It covers ambulance, hospital, specialist fees in entirety, and the bulk of any rehab expenses. It also pays up to 80% of your wages if you are unable to work after the accident. It covers things like medical misadventure, assault etc. In return for this blanket coverage, you cannot sue for personal injury in NZ. You can sue for exemplary damages but that's a different story. We have a comprehensive gov Worksafe body that polices safety in workplaces and has the power to fine and shut down workplaces. So..... kiwis have very few medical costs for accidents, no clogged court systems, no real need for health insurance related to accidents and a national body who's only responsibility is making sure our workplaces are safe. Call me crazy, but I'm not sure the American health system is that great.....

I dislocated my knee a few weeks before a friend living in Chicago did a similar thing. Mine was fairly bad, required an ambulance to hospital and orthopaedic followups. Hers spontaneously relocated but did need Xrays etc. Hers cost her $15,000 all up. Mine cost a few hundred dollar in physiotherapy surcharges during rehab.

ePalmtrees

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Re: 36 financial horror stories
« Reply #23 on: February 25, 2018, 02:10:41 PM »
I'm sorry, I find it hard to believe that you didn't know it was a loan. You would have had to sign paperwork agreeing to the terms or else they would have had no legal right to collect the money with interest.

That would imply that they actually READ the paperwork that they signed.

I can assure you that gobs of people buy houses and never, ever, read the documents they are signing.  Why should student loans be any different?

Well, yeah, I guess that's what I'm saying, is that it would be that person's fault.

Xenantaya

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Re: 36 financial horror stories
« Reply #24 on: February 26, 2018, 09:03:54 AM »
No. 5 sounds like where the person did the right thing, but now has a bad case of hindsight bias.  Diversifying by selling stock in one company to invest in "retirement funds" (which I assume / hope are mutual funds) is always the right course ex ante, as the vast majority of internet start-ups go belly up and their options are worth nothing.  Yes, if it turns out that you worked for that 1 in 100 firm that becomes Microsoft or Amazon, you're going to feel bad, but that doesn't change that selling their stock and buying broader based funds was still the correct choice.

talltexan

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Re: 36 financial horror stories
« Reply #25 on: February 27, 2018, 07:22:31 AM »
Indeed I'm enjoying the other side of that: sold 2/3 of my stake in my employer's stock at $87/share, and today it's trading $77/share (while SP is up).